DealBook: HSBC to Pay $1.92 Billion to Settle Money Laundering Charges

Federal and state authorities announced on Tuesday that they had secured a record $1.92 billion payment from HSBC to settle charges that the British banking giant transferred billions of dollars for sanctioned nations, facilitated Mexican drug cartels to launder tainted money and worked with Saudi Arabian banks with ties to terrorist organizations.

The case, a major victory for the government, represents the conclusion of a multi-agency investigation. It convened the Justice Department, the Manhattan district attorney’s office, bank regulators and the Treasury Department.

In a filing in Federal District Court in Brooklyn, federal prosecutors said the bank had agreed to enter into a deferred prosecution agreement and to forfeit $1.26 billion. The four-count criminal information filed in the court charged HSBC with failure to maintain an effective anti-money laundering program, failure to conduct due diligence on its foreign correspondent affiliates and violating sanctions and the Trading With the Enemy Act.

“HSBC is being held accountable for stunning failures of oversight – and worse – that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries, and to facilitate hundreds of millions more in transactions with sanctioned countries, ” Lanny A. Breuer, the head of the Justice Department’s criminal division, said in a statement.

At a news conference in Brooklyn, Mr. Breuer defended the decision to not indict the bank, calling the action “a very just, very real and very powerful result.”

The deal, which required the bank to admit to the accusations, lasts for five years. If the bank violates the terms of the agreement, prosecutors can move to indict the bank.

In addition to forfeiting the $1.26 billion, HSBC agreed to pay the Office of the Comptroller of the Currency announced $500 million as part of a civil penalty against the bank, while the Federal Reserve assessed a $165 million civil penalty.

HSBC also entered in a deferred prosecution agreement with the Manhattan district attorney’s office, admitting that it violated New York State law by falsifying the records of New York financial institutions.

The Manhattan district attorney, Cyrus R. Vance Jr., said in a statement: “New York is a center of international finance, and those who use our banks as a vehicle for international crime will not be tolerated.”

In a statement, Stuart Gulliver, the chief executive of HSBC, said: “We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organization from the one that made those mistakes.”

The turmoil at HSBC is playing out amid a broad crackdown on foreign by federal and state authorities to stanch the flow of illegal money across the world. The officials have been working to clamp down the financing pipeline to cartels and terrorist organizations.

For the most part, though, the investigations have centered on so-called sanctions violations. In June, the ING Group reached a $619 million settlement with government authorities to resolve accusations that it had moved billions of dollars through its United States subsidiaries for rogue nations like Iran.

In the latest action, federal and state authorities reached a $327 million agreement with another British bank, Standard Chartered, on Monday. The bank admitted to processing thousands of transactions worth hundreds of millions of dollars for Iranian and Sudanese clients.

Beyond the sanctions violations at HSBC, prosecutors unearthed evidence that the bank enabled Mexican drug cartels to launder money into the American financial system.

Problems for HSBC mounted in July when the Senate Permanent Subcommittee on Investigations accused the bank of exposing the United States “financial system to money laundering and terrorist financing risks.”

At the upper echelons of the organization, the Senate report found, some bank executives had ignored warning signs and permitted the illegal behavior to continue unabated from 2001 to 2010.

The original problems began when agents with Immigration and Customs Enforcement spotted questionable trails of money between HSBC’s Mexican and United States operations.

Despite a chorus of warnings from federal banking regulators about the vulnerability of HSBC’s operations throughout the world, the bank didn’t fortify its controls, the Senate report found.

One of HSBC’s branches in the Cayman Islands, the Senate report said, had virtually no oversight despite holding roughly 50,000 client accounts.

Alarmed, a compliance officer complained, Senate investigators found, and asked whether practices at the bank were part of “the School of Low Expectations Banking.”

Particularly concerning to prosecutors was the seeming complicity of senior bank executives, according to law enforcement officials briefed on the matter.

For example, an HSBC executive rallied for the firm to continue dealings with Al Rajhi Bank of Saudi Arabia, even though some of the owners of the firm had substantive links to the financing of terrorism, according to the report.

HSBC’s Mexican operations moved at least $7 billion from 2007 to 2009 into the United States. Such a large volume of money, law enforcement authorities warned, had to include “drug proceeds.”

In July at the Congressional hearings, HSBC executives vowed to reform. As part of that, David Bagley, who served as head of compliance at the British bank since 2002, announced his resignation during the hearings.

HSBC has since on a hiring spree, fortifying its ranks with seasoned executives. On Tuesday, prosecutors praised those efforts, noting that the bank cooperated with the investigation

HSBC brought in Stuart A. Levey as chief legal officer in January. Mr. Levey, a former under secretary at the Treasury Department who focused on terrorism and financial intelligence, has been working out new internal standards that span the company for monitoring and policing the movement of money. In August, the bank hired Robert Werner, who formerly oversaw the group at the Treasury Department that enforces sanctions. In its latest move to improve controls, HSBC promoted Mr. Warner on Tuesday to oversee a special unit dedicated to anti-money laundering.

William Alden and Ben Protess contributed reporting.

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Morsi Spokesman Tries to Clarify Military Order

Petr David Josek/Associated Press

Demonstrators camping out in Cairo's Tahrir Square on Monday.

CAIRO — A day after President Mohamed Morsi formally directed the military to help keep public order and authorized soldiers to arrest civilians, a spokesman on Monday sought to draw distinctions between the order and the forms of martial law that the Egyptian Army had previously imposed.

The spokesman, Khaled al-Qazzaz, said the president empowered the military for the limited purpose of protecting polling stations during Saturday’s constitutional referendum. He also said the president had instructed the army to refer any civilians arrested by soldiers to a civilian court for trial, instead of military tribunals, reversing the blanket authorizations that the Egyptian military has long demanded when it takes on a policing role in the streets.

“This is very different from what happened under the SCAF,” said Mr. Qazzaz, referring to the Supreme Council of the Armed Forces, which ruled Egypt after President Hosni Mubarak was ousted and until Mr. Morsi took office. “There will be no military trials.”

But Heba Morayef, a researcher with Human Rights Watch, noted that the text of the order allowed the military to keep taking civilians to military courts. “Had he wanted to,” Ms. Morayef said, “President Morsi could have stipulated that the military’s jurisdiction would have been limited in this case and that every civilian will be referred to a civilian court, but he chose not to.”

Mr. Morsi’s latest assurances were unlikely to comfort his growing cast of opponents, who have taken to the streets in large numbers repeatedly since late November, when he issued a decree putting his decisions above the law. The president was forced to rescind most of his decree, but he has not budged on a central opposition demand: that he cancel the Saturday referendum on the constitutional draft.

Faced with the possibility of the vote, Egypt’s opposition parties on Monday were weighing their approach to the referendum and said they would continue to hold large protests. The biggest opposition coalition, the National Salvation Front, said it would announce Tuesday whether it would call for a boycott of the referendum, or instead urge the public to vote down the draft charter, which opposition groups have criticized as deeply flawed and written by a panel representing narrow, Islamist interests.

There appeared to be divisions and flux within the opposition. On Sunday, the opposition used language that seemed to favor a boycott, saying in a statement that it rejected “lending legitimacy to a referendum that will definitely lead to more sedition and division.” But in an interview broadcast Monday, the coalition’s coordinator, Mohamed ElBaradei, said, “We might go to the vote.”

During the interview with Christiane Amanpour of CNN, Mr. ElBaradei, the former chief of the International Atomic Energy Agency, urged Mr. Morsi to delay the referendum for a few months, saying that the draft constitution — a “sham,” he called it — did not adequately protect women, freedom of expression or religion.

Mr. ElBaradei asserted that at least half of the country harbored similar reservations about the charter, and insisted that the opposition’s tactics — holding large protests and raising the possibility of a boycott — were not just obstructionism by groups who have struggled to mount a credible challenge to the better-organized Islamist groups.

“We are at a cross in the road,” he said. “It’s not that we’re fighting for the sake of fighting. It’s not that we’re sore losers.”

Mr. ElBaradei left open several possible courses of action, including a boycott. “If need be, we probably will go to the polls and make sure the document will not pass. Even if it will pass, we will continue to fight.”

There were other signs of momentum toward a highly contested vote on Saturday. The April 6th Revolutionary Youth Group, which is not a member of the coalition but coordinates activities with the National Salvation Front, began a campaign urging a no vote, called “Your Constitution does not represent us.”

A group representing administrative court judges said its members would supervise the referendum, under certain conditions, demanding a secure environment and even life insurance policies for judges, possibly smoothing the way for a credible contest. Other judges’ groups have said they would boycott the vote. A spokesman for the Muslim Brotherhood, the Islamist party that forms the primary base of Mr. Morsi’s support, said on Monday that they believed a sufficient numbers of judges had agreed to supervise the polls, ensuring that the vote could go forward.

Mayy El Sheikh contributed reporting from Cairo.

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Mild sprain has Redskins' RG3 uncertain for Sunday

ASHBURN, Va. (AP) — All the medical terms associated with Robert Griffin III's knee injury can be boiled down to one simple message: It's not too bad.

Beyond that, there are still some very important unknowns.

The NFL's top-rated quarterback might or might not play Sunday when the Washington Redskins visit the Cleveland Browns. Coach Mike Shanahan, knowing full well that it makes the other team work extra to prepare for two quarterbacks, will no doubt wait as long as possible to publicly commit one way or the other to Griffin or fellow rookie Kirk Cousins.

"Both of them will have a game plan," Shanahan said Monday.

The interior of Griffin's right knee was the subject of intense scrutiny during Shanahan's weekly news conference, when it was shown that an injury to a franchise player like RG3 can flummox even a seasoned coach. Shanahan initially said Griffin had a "strain of the ACL" before later correcting the diagnosis to a sprained LCL, with the coach stepping away from the podium to demonstrate the location of the ligament involved.

The upshot: Griffin has a mild, or Grade 1, sprain of the lateral collateral ligament located on the outside of the knee, caused when he was hit by defensive tackle Haloti Ngata at the end of a 13-yard scramble late in regulation of the 31-28 overtime win over the Baltimore Ravens.

"When I looked at it on film," Shanahan said, "I thought it would be worse than it was."

The LCL is one of four ligaments in the knee. A Grade 1 sprain typically means the ligament is stretched or has some minor tears and usually doesn't require surgery. Griffin will get multiple treatments daily and will probably have to wear a brace for several weeks.

The next major benchmark is whether Griffin will able to take part when practice resumes on Wednesday.

"You're hoping with rehab it gets better very quickly," Shanahan said. "But we don't know for sure. ... He's definitely not ruled out for the Cleveland game."

Griffin's father, Robert Griffin Jr., said in a text message that his son was "feeling good" and that "we will know by Thursday" whether Griffin III will be able to suit up against the Browns.

The most severe knee injury usually associated with sports is a season-ending torn ACL, the anterior cruciate ligament. Griffin tore the ACL in his right knee while playing for Baylor in 2009, but Shanahan said Griffin's reconstructed ACL "looks great" and that there's "no problem there."

"He's doing good. He's in high spirits," left tackle Trent Williams said after speaking with Griffin on Monday. "It was a pretty nasty, awkward hit, and for him not to be seriously injured is a blessing."

No. 2 overall pick Griffin has become a phenomenon in his debut NFL season, leading the Redskins — a team that went 5-11 last year — to four straight victories to put the record at 7-6, one game behind the first-place New York Giants in the NFC East. His performance Sunday put him atop the league with a 104.2 passer rating, better than Peyton Manning, Aaron Rodgers, Tom Brady and everyone else.

Fourth-rounder Cousins might not be much of a drop-off, especially after his super-sub performance against the Ravens. When Griffin left for one play, Cousins converted a third-and-6 with a pass to Pierre Garcon that drew a pass interference penalty on Chris Johnson.

When Griffin left for good later in the drive, Cousins completed two passes in two plays, and his nice pump fake allowed Garcon to get open for an 11-yard touchdown with 29 seconds left in regulation.

Cousins then did his best RG3 impersonation, running the quarterback draw on the 2-point conversion to tie the game.

"You're running the scout team the majority of the time, and you're expected to go in there and perform," Shanahan said. "So there's a lot of pressure on people. Some people can handle it; other people can't. But when you prepare yourself like he has, it didn't surprise me that he was flawless in what he did."

Shanahan defended the decision to have Griffin return to the game for four plays after the injury, saying he left the decision in the hands of Dr. James Andrews, the renowned sports physician who is on the sidelines for most Redskins games.

"He's the one that gives me that information," Shanahan said. "It's way over my head."

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Follow Joseph White on Twitter: http://twitter.com/JGWhiteAP

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Rate of Childhood Obesity Falls in Several Cities

PHILADELPHIA — After decades of rising childhood obesity rates, several American cities are reporting their first declines.

The trend has emerged in big cities like New York and Los Angeles, as well as smaller places like Anchorage, Alaska, and Kearney, Neb. The state of Mississippi has also registered a drop, but only among white students.

“It’s been nothing but bad news for 30 years, so the fact that we have any good news is a big story,” said Dr. Thomas Farley, the health commissioner in New York City, which reported a 5.5 percent decline in the number of obese schoolchildren from 2007 to 2011.

The drops are small, just 5 percent here in Philadelphia and 3 percent in Los Angeles. But experts say they are significant because they offer the first indication that the obesity epidemic, one of the nation’s most intractable health problems, may actually be reversing course.

The first dips — noted in a September report by the Robert Wood Johnson Foundation — were so surprising that some researchers did not believe them.

Deanna M. Hoelscher, a researcher at the University of Texas, who in 2010 recorded one of the earliest declines — among mostly poor Hispanic fourth graders in the El Paso area — did a double-take. “We reran the numbers a couple of times,” she said. “I kept saying, ‘Will you please check that again for me?’ ”

Researchers say they are not sure what is behind the declines. They may be an early sign of a national shift that is visible only in cities that routinely measure the height and weight of schoolchildren. The decline in Los Angeles, for instance, was for fifth, seventh and ninth graders — the grades that are measured each year — between 2005 and 2010. Nor is it clear whether the drops have more to do with fewer obese children entering school or currently enrolled children losing weight. But researchers note that declines occurred in cities that have had obesity reduction policies in place for a number of years.

Though obesity is now part of the national conversation, with aggressive advertising campaigns in major cities and a push by Michelle Obama, many scientists doubt that anti-obesity programs actually work. Individual efforts like one-time exercise programs have rarely produced results. Researchers say that it will take a broad set of policies applied systematically to effectively reverse the trend, a conclusion underscored by an Institute of Medicine report released in May.

Philadelphia has undertaken a broad assault on childhood obesity for years. Sugary drinks like sweetened iced tea, fruit punch and sports drinks started to disappear from school vending machines in 2004. A year later, new snack guidelines set calorie and fat limits, which reduced the size of snack foods like potato chips to single servings. By 2009, deep fryers were gone from cafeterias and whole milk had been replaced by one percent and skim.

Change has been slow. Schools made money on sugary drinks, and some set up rogue drink machines that had to be hunted down. Deep fat fryers, favored by school administrators who did not want to lose popular items like French fries, were unplugged only after Wayne T. Grasela, the head of food services for the school district, stopped buying oil to fill them.

But the message seems to be getting through, even if acting on it is daunting. Josh Monserrat, an eighth grader at John Welsh Elementary, uses words like “carbs,” and “portion size.” He is part of a student group that promotes healthy eating. He has even dressed as an orange to try to get other children to eat better. Still, he struggles with his own weight. He is 5-foot-3 but weighed nearly 200 pounds at his last doctor’s visit.

“I was thinking, ‘Wow, I’m obese for my age,’ ” said Josh, who is 13. “I set a goal for myself to lose 50 pounds.”

Nationally, about 17 percent of children under 20 are obese, or about 12.5 million people, according to the Centers for Disease Control and Prevention, which defines childhood obesity as a body mass index at or above the 95th percentile for children of the same age and sex. That rate, which has tripled since 1980, has leveled off in recent years but has remained at historical highs, and public health experts warn that it could bring long-term health risks.

Obese children are more likely to be obese as adults, creating a higher risk of heart disease and stroke. The American Cancer Society says that being overweight or obese is the culprit in one of seven cancer deaths. Diabetes in children is up by a fifth since 2000, according to federal data.

“I’m deeply worried about it,” said Francis S. Collins, the director of the National Institutes of Health, who added that obesity is “almost certain to result in a serious downturn in longevity based on the risks people are taking on.”

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Mobile Apps for Children Fall Short on Disclosure to Parents, F.T.C. Report Says

Several hundred of the most popular educational and gaming mobile apps for children fail to give parents basic explanations about what kinds of personal information the apps collect from children, who can see that data and what they use it for, a new federal report says.

The apps often transmit the phone number, precise location or unique serial code of a mobile device to app developers, advertising networks or other companies, according to the report by the Federal Trade Commission, released Monday. Regulators said such information could be used to find or contact children or track their activities across different apps without their parents’ knowledge or consent.

The agency reviewed 400 of the most popular children’s apps available on Google and Apple platforms, and reported that only 20 percent disclosed their data collection practices.

“The survey results described in this report paint a disappointing picture of the privacy protections provided by apps for children,” the report said.

Regulators said they were investigating whether the practices of certain apps violated a federal law requiring Web site operators to get parents’ permission before collecting or sharing names, phone numbers, addresses or other personal information obtained from children under 13.

The report comes as the agency is preparing to strengthen those protections by requiring site operators to obtain parental consent before collecting many other kinds of personal information from children.

But over the last few months, the agency’s efforts have met with pushback from Apple, Facebook, Google and Viacom as well as from technology associations and marketing industry groups, who say the agency’s proposed solution is so broad that it could inhibit companies from offering sites, apps and other services for children.

In its report, the agency did not disclose the names of apps it found problems with.

“We think this is a systematic problem,” said Jessica Rich, the associate director of the F.T.C.’s division of financial practices, adding that parents should not think “if they avoid certain apps, they are home free.”

Representatives of the app industry said they had already been working with app developers to make disclosures about data collection clearer and simpler for consumers. But “the F.T.C. report is a reminder that there is more work to do,” said Jon Potter, the president of the Application Developers Alliance, an industry group.

The agency’s researchers also reported that most apps failed to tell parents when they involved interactive features like advertising, social network sharing or allowing children to make purchases for virtual goods within the app.

For instance, researchers found that 58 percent of the children’s apps contained ads, even though just 15 percent disclosed this before download. Moreover, of the 24 apps that stated they did not contain in-app advertising, 10 did contain ads, the report said.

Children’s advocates said the report’s findings reinforced the need to strengthen online privacy protections for children. The agency has not substantially revised its regulations based on the federal Children’s Online Privacy Protection Act, or Coppa, since the law’s introduction more than a decade ago.

“This makes the case as to why we need major revisions,” said James Steyer, the chief executive of Common Sense Media, a nonprofit advocacy and education group in San Francisco that focuses on children and technology. “It shows that parents don’t have enough information to make good choices.”

The timing of the report suggests that the agency is trying to lay the groundwork for its push for broader children’s online privacy protections. In interviews, agency officials have said the protections needed to be modernized to keep pace with developments in mobile apps, voice recognition, facial recognition and comprehensive online data collection by marketers.

For example, regulators have proposed a longer list of data about children that would require parental consent for Web site operators to collect, including photos, voice recordings and unique mobile device serial numbers. Agency officials have also emphasized that they considered the precise location of a mobile device to be personal information whose collection required parental permission.

If the agency includes these changes in the final version of its updated regulations, apps would need to get parental consent for a number of data collection practices that are in widespread use.

For example, agency researchers reported that almost 60 percent of the children’s apps in the study transmitted a device’s ID number, most commonly to an advertising network or another third party. But only 20 percent of the apps disclosed information about these kinds of practices. Regulators said their concern was that marketers or other entities could use these unique device numbers to follow individual children across multiple apps over time, compiling detailed dossiers on their activities.

“The transmission of kids’ information to third parties that are invisible and unknown to parents raises concerns,” the report said.

Although state and federal regulators, along with industry groups, have been working to improve disclosures for consumers about how mobile apps collect and use their data, progress has been incremental.

Kamala D. Harris, the attorney general of California, signed an agreement this year with seven leading app platforms to make sure apps available through their stores displayed privacy policies. She also recently sent letters to 100 companies whose apps, she said, did not comply with a California law requiring them to post privacy policies.

Last week, Ms. Harris’s office sued Delta Air Lines for not warning users of its Fly Delta app that it collected personal information like a user’s full name, phone number, e-mail address, photographs and location.

App industry associations have also been working to improve transparency for consumers and parents. For instance, the Application Developers Alliance, in a joint project with the American Civil Liberties Union and other advocacy groups, has created prototype disclosure notices that apps could voluntarily display before consumers download them.

“I think the app industry continues to work with our members, companies and consumer groups to identify and eventually implement more effective ways of communicating with consumers,” said Mr. Potter, the president of the app developers’ group.

Ms. Rich of the Federal Trade Commission said she hoped the agency’s report would “light a fire” under such efforts. She added that the agency intended to conduct studies regularly on the children’s app market and publicly report its findings.

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Morsi’s Concessions Fail to Quiet Egyptian Opponents

Tara Todras-Whitehill for The New York Times

Egyptian Republican guards stood in front of a barrier near the presidential palace in Cairo, as protesters demonstrated against President Morsi on Sunday.

CAIRO — The political crisis over Egypt’s draft constitution hardened on both sides on Sunday, as President Mohamed Morsi prepared to deploy the army to safeguard balloting in a planned referendum on the new charter and his opponents called for more protests and a boycott to undermine the vote.

Thousands of demonstrators streamed toward the presidential palace for a fifth night of protests against Mr. Morsi and the proposed charter, and the president, a former leader of the Muslim Brotherhood, formally issued an order asking the military to protect such “vital institutions” and to secure the vote.

With the decision to boycott the referendum, the opposition signaled that it had given up hope that it could defeat the draft charter at the polls, and had opted instead to try to undermine the referendum’s legitimacy.

The call for new protests — with major demonstrations expected at the presidential palace again on Tuesday and Friday — ensures that questions about Egypt’s national unity and stability will continue to overshadow debate about the specific contents of the charter. Opponents say the proposed constitution, rushed through an assembly dominated by Islamist allies of the president, fails to adequately protect individual and minority rights and opens the door to greater religious influence over the state.

Over the past two weeks, hundreds of thousands of people have poured into the streets to oppose the charter, crowds have attacked 28 Muslim Brotherhood offices and the group’s headquarters, and at least seven people have died in clashes between Islamist and secular political factions.

The opposition “rejects lending legitimacy to a referendum that will definitely lead to more sedition and division,” said Sameh Ashour, a spokesman for a coalition that calls itself the National Salvation Front. Holding a referendum “in a state of seething and chaos,” Mr. Ashour said, amounted to “a reckless and flagrant absence of responsibility, risking driving the country into violent confrontations that endanger its national security.”

Whether to ask voters to vote no or to stay home has been the subject of heated debate in opposition circles in the week since Mr. Morsi announced the referendum, to be held on Saturday.

Now the question is whether opponents can translate the energy of the protests against the charter into more votes and seats in parliamentary elections that are expected to take place two months after the referendum.

Both sides acknowledge that President Morsi, of the Muslim Brotherhood’s political party, has hurt himself and his party politically with the act that first touched off the protests: a decree giving himself authoritarian powers and putting his decisions above the reach of judicial review until the new charter is passed. He suffered even more, they say, when the backlash against the decree and the new constitution led to a night of clashes between his Islamists supporters and their more secular opponents that left at least six dead and hundreds more injured.

Mr. Morsi surprised his critics after midnight on Sunday by withdrawing almost all the provisions of his decree, a step he said he took on the recommendation of about 40 politicians and thinkers he convened on Saturday for a “national dialogue” meant to resolve the crisis. Leading opposition figures were invited to take part, but nearly all declined; according to a list broadcast on state television, most of the attendees were Islamists of various stripes, and the only prominent secular politician on hand was the former presidential candidate Ayman Nour.

A spokesman for the group said at an authorized news conference that, Mr. Morsi was issuing a new, more limited decree that would give immunity from judicial scrutiny only to “constitutional declarations,” a narrow if hazily defined category of actions. His actions under the previous decree would also be protected, including dismissal of the public prosecutor appointed under Hosni Mubarak.

Through the spokesman for the “national dialogue” group, Mohamed Salim el-Awa, Mr. Morsi even signaled a willingness to allow his opponents and allies to negotiate a package of amendments to the constitution that all sides would agree to enact once the draft is approved.

Michael Schwirtz contributed reporting from New York.

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Apple, Samsung face off in court again

SAN JOSE (Reuters) – Apple Inc and Samsung Electronics squared off again in court on Thursday, as the iPhone maker prepares to convince a U.S. district judge to ban sales of a number of the Korean company’s devices and defend a $ 1.05 billion jury award.

Apple scored a sweeping legal victory in August at the conclusion of its landmark case against its arch-foe, when a U.S. jury found Samsung had copied critical features of the iPhone and iPad and awarded it $ 1.05 billion in damages.

U.S. District Judge Lucy Koh is expected to address a range of issues at the hearing, which began Thursday afternoon. They include setting aside any of the jury’s findings on liability, juror misconduct, and the requested injunction.

Twenty four of Samsung’s smartphones were found to have infringed on Apple’s patents, while two of Samsung’s tablets were cleared of similar allegations.

Koh began by questioning the basis for some of the damages awarded by the jury, putting Apple’s lawyers on the defensive.

“I don’t see how you can evaluate the aggregate verdict without looking at the pieces,” Koh said.

Samsung’s lawyers argued the ruling against it should be “reverse engineered” to be sure the $ 1.05 billion was legally arrived at by the jury, while Apple said the ruling should stand as is.

FIERCEST RIVAL

Samsung is Apple’s fiercest global business rival, and their battle for consumers’ allegiance is shaping the landscape of the smartphone and tablet industry, and has claimed several high-profile victims including Nokia.

While most of the devices facing injunction are older and, in some cases, out of the market, such injunctions have been key for companies trying to increase their leverage in courtroom patent fights.

In October, a U.S. appeals court overturned a pretrial sales ban against Samsung’s Galaxy Nexus smartphone, dealing a setback to Apple’s battle against Google Inc’s increasingly popular mobile software.

Some analysts say Apple’s willingness to license patents to HTC could convince Koh it does not need the injunction, as the two companies could arrive at a licensing deal.

Apple is also attempting to add more than $ 500 million to the $ 1 billion judgment because the jury found Samsung willfully infringed on its patents.

Samsung, for its part, wants the verdict overturned, saying the foreman of the jury in the trial did not disclose that he was once embroiled in litigation with Seagate Technology, a company that Samsung invested in.

Both Apple and Samsung have filed separate lawsuits covering newer products, including the Samsung Galaxy Note II. That case is pending in U.S. District Court in San Jose and is set for trial in 2014.

(Reporting By Poornima Gupta)

Gadgets News Headlines – Yahoo! News

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New tragedy rocks NFL's regularly scheduled world

The games go on.

For the second straight weekend, tragedy rocked the regularly scheduled world of the NFL. It left families, friends, teammates and coaching staffs grieving over yet another senseless loss of life. It also left the league facing questions not only about efforts to safeguard players on the field but whether it's doing enough to help them stay out of harm's way once they step outside the white lines.

In the early-morning hours Saturday in Irving, Texas, 24-year-old Dallas Cowboys nose tackle Josh Brent got behind the wheel of his Mercedes alongside teammate Jerry Brown and sped off, the prelude to a one-car accident that would leave Brown dead at 25 and Brent sitting in jail facing a felony charge of intoxicated manslaughter.

All this happened little more than three years after Brent was sentenced to probation and 60 days in jail in a plea agreement following his drunken driving arrest while playing football at the University of Illinois, where he and Brown were teammates as well.

That it happened just a week after Kansas City linebacker Jovan Belcher shot his girlfriend to death, then drove to the Chiefs' training facility and took his own life with the same gun, raised questions about the league's responsibility to the young men it empowers and enriches — in some cases, almost overnight.

"I don't know that anybody has the answer, to be honest. They're human beings, kids in most of the cases like this, and they're going to make mistakes," said Dan Reeves, who played seven years for the Cowboys before launching an NFL coaching career that included four stops over four decades.

"As a coach, you've got more than 50 players, if you count practice squad guys, that you're trying to keep an eye on. And both the league and the team invest an awful lot of time and money trying to educate them about the opportunities and pitfalls that are set out in front of them. ...

"But no matter what you do, some are going to believe the bad stuff will never happen to them. And teams spend so much time together, they become like families. It's easy to get lulled into thinking you know which ones need a pat on the back and which ones a kick in the behind. Yet this shows we don't always learn the real strengths and weaknesses of some until it's too late. Everybody deals with that knowledge in their own way.

"But if you're going to play," Reeves said finally. "I don't know any other way to honor that person than to play as hard as you can."

The emotional scene that roiled Kansas City in the wake of Belcher's murder-suicide a week earlier shifted to Cincinnati, where the Cowboys arrived Saturday night to complete preparations before Sunday's kickoff against the Bengals.

The team cut short its regular two-hour meeting and made sure counselors were on hand to speak to players afterward. But when owner Jerry Jones spoke with a Fox interviewer outside the locker room shortly before the game, his eyes were rimmed red and he spoke haltingly about Brown.

"Our team loved him. They certainly are conscious of him and want his family to know and have as much of them as they can give. At the same time," he added, "they know that one of the best things they can do for him and his memory is to come to the game today, is go out and play well."

How the NFL responds to this latest tragedy remains to be seen. Earlier this summer, cognizant of both the rising number of domestic violence and DUI incidents involving players, Commissioner Roger Goodell pledged to address both problems.

"We are going to do some things to combat this problem because some of the numbers on DUIs and domestic violence are going up and that disturbs me," he told CBS Sports. "When there's a pattern of mistakes, something has got to change."

In several important ways, player conduct has already improved significantly since Goodell took over from Paul Tagliabue.

In 2006, Goodell's first season, 68 players were arrested for crimes more severe than a traffic violation. Since then, arrests for crimes including domestic violence, drunken driving and gun possession are down 40 percent.

Yet, as Goodell noted, the number of incidents in the last year have climbed at an alarming rate — according to one study, 21 of the league's 32 teams had at least one player charged with domestic violence or sexual assault — and the tragedies involving players on successive weekends has already prompted accusations that the league isn't doing nearly enough.

On Saturday in Kansas City, a dozen members of the Chiefs' organization attended a memorial service for Kasandra Perkins. Among them was general manager Scott Pioli, whom Belcher spoke with in the parking lot of the Chiefs facility to thank before turning the gun on himself. A day later, just as the Chiefs did against the Panthers last Sunday, the Cowboys rallied to win their game against the Bengals.

The team has already canceled its annual Christmas party, scheduled for Monday at Cowboys Stadium, and instead began planning a memorial service for Brown.

"From here on, they're in uncharted waters," Reeves said. "No one can point the best way forward. I was lucky in that sense: We never had to deal with the nightmare of losing a friend and teammate. One thing I'm certain of, though — it's going to haunt some of them for a long time to come."

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A Breakthrough Against Leukemia Using Altered T-Cells

PHILIPSBURG, Pa. — Emma Whitehead has been bounding around the house lately, practicing somersaults and rugby-style tumbles that make her parents wince.

It is hard to believe, but last spring Emma, then 6, was near death from leukemia. She had relapsed twice after chemotherapy, and doctors had run out of options.

Desperate to save her, her parents sought an experimental treatment at the Children’s Hospital of Philadelphia, one that had never before been tried in a child, or in anyone with the type of leukemia Emma had. The experiment, in April, used a disabled form of the virus that causes AIDS to reprogram Emma’s immune system genetically to kill cancer cells.

The treatment very nearly killed her. But she emerged from it cancer-free, and about seven months later is still in complete remission. She is the first child and one of the first humans ever in whom new techniques have achieved a long-sought goal — giving a patient’s own immune system the lasting ability to fight cancer.

Emma had been ill with acute lymphoblastic leukemia since 2010, when she was 5, said her parents, Kari and Tom. She is their only child.

She is among just a dozen patients with advanced leukemia to have received the experimental treatment, which was developed at the University of Pennsylvania. Similar approaches are also being tried at other centers, including the National Cancer Institute and Memorial Sloan-Kettering Cancer Center in New York.

“Our goal is to have a cure, but we can’t say that word,” said Dr. Carl June, who leads the research team at the University of Pennsylvania. He hopes the new treatment will eventually replace bone-marrow transplantation, an even more arduous, risky and expensive procedure that is now the last hope when other treatments fail in leukemia and related diseases.

Three adults with chronic leukemia treated at the University of Pennsylvania have also had complete remissions, with no signs of disease; two of them have been well for more than two years, said Dr. David Porter. Four adults improved but did not have full remissions, and one was treated too recently to evaluate. A child improved and then relapsed. In two adults, the treatment did not work at all. The Pennsylvania researchers were presenting their results on Sunday and Monday in Atlanta at a meeting of the American Society of Hematology.

Despite the mixed results, cancer experts not involved with the research say it has tremendous promise, because even in this early phase of testing it has worked in seemingly hopeless cases. “I think this is a major breakthrough,” said Dr. Ivan Borrello, a cancer expert and associate professor of medicine at the Johns Hopkins University School of Medicine.

Dr. John Wagner, the director of pediatric blood and marrow transplantation at the University of Minnesota, called the Pennsylvania results “phenomenal” and said they were “what we’ve all been working and hoping for but not seeing to this extent.”

A major drug company, Novartis, is betting on the Pennsylvania team and has committed $20 million to building a research center on the university’s campus to bring the treatment to market.

Hervé Hoppenot, the president of Novartis Oncology, called the research “fantastic” and said it had the potential — if the early results held up — to revolutionize the treatment of leukemia and related blood cancers. Researchers say the same approach, reprogramming the patient’s immune system, may also eventually be used against tumors like breast and prostate cancer.

To perform the treatment, doctors remove millions of the patient’s T-cells — a type of white blood cell — and insert new genes that enable the T-cells to kill cancer cells. The technique employs a disabled form of H.I.V. because it is very good at carrying genetic material into T-cells. The new genes program the T-cells to attack B-cells, a normal part of the immune system that turn malignant in leukemia.

The altered T-cells — called chimeric antigen receptor cells — are then dripped back into the patient’s veins, and if all goes well they multiply and start destroying the cancer.

The T-cells home in on a protein called CD-19 that is found on the surface of most B-cells, whether they are healthy or malignant.

A sign that the treatment is working is that the patient becomes terribly ill, with raging fevers and chills — a reaction that oncologists call “shake and bake,” Dr. June said. Its medical name is cytokine-release syndrome, or cytokine storm, referring to the natural chemicals that pour out of cells in the immune system as they are being activated, causing fevers and other symptoms. The storm can also flood the lungs and cause perilous drops in blood pressure — effects that nearly killed Emma.

Steroids sometimes ease the reaction, but they did not help Emma. Her temperature hit 105. She wound up on a ventilator, unconscious and swollen almost beyond recognition, surrounded by friends and family who had come to say goodbye.

But at the 11th hour, a battery of blood tests gave the researchers a clue as to what might help save Emma: her level of one of the cytokines, interleukin-6 or IL-6, had shot up a thousandfold. Doctors had never seen such a spike before and thought it might be what was making her so sick.

Dr. June knew that a drug could lower IL-6 — his daughter takes it for rheumatoid arthritis. It had never been used for a crisis like Emma’s, but there was little to lose. Her oncologist, Dr. Stephan A. Grupp, ordered the drug. The response, he said, was “amazing.”

Within hours, Emma began to stabilize. She woke up a week later, on May 2, the day she turned 7; the intensive-care staff sang “Happy Birthday.”

Since then, the research team has used the same drug, tocilizumab, in several other patients.

In patients with lasting remissions after the treatment, the altered T-cells persist in the bloodstream, though in smaller numbers than when they were fighting the disease. Some patients have had the cells for years.

Dr. Michel Sadelain, who conducts similar studies at the Sloan-Kettering Institute, said: “These T-cells are living drugs. With a pill, you take it, it’s eliminated from your body and you have to take it again.” But T-cells, he said, “could potentially be given only once, maybe only once or twice or three times.”

The Pennsylvania researchers said they were surprised to find any big drug company interested in their work, because a new batch of T-cells must be created for each patient — a far cry from the familiar commercial strategy of developing products like Viagra or cholesterol medicines, in which millions of people take the same drug.

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Mobile Video Calling Spreads as Smartphones and Tablets Improve

Peter DaSilva for The New York Times

Tango engineers developing a cross-platform mobile voice and video, text, picture and video messaging application.

PALO ALTO, Calif. — The next competition in technology is your face — anywhere, anytime.

As the cameras and screens of smartphones and tablets improve, and as wireless networks offer higher bandwidth, more companies are getting into the business of enabling mobile video calls.

The details vary from one service to the next, but the experiences are similar: from anywhere in the world with a modern wireless network, a smartphone’s screen fills with the face of a friend or relative. The quality is about the same jerky-but-functional level as most desktop video. Sound is not always perfectly synced with the image, but it is very close. The calls start and end the same way, by pressing a button on the screen.

Mobile video calling has risen so quickly that industry analysts have not yet compiled exact numbers. But along the way, it is creating new business models, new stresses on mobile networks and even new rules of etiquette.

“All the communications — social messages, calls, texts and video — are merging fast,” said Eric Setton, co-founder and chief technology officer of Tango Mobile, whose free video calling service has 80 million active users. An additional 200,000 join daily, Mr. Setton said.

Once an interesting endeavor for a few start-ups like Tango, mobile video has caught the attention of big companies. Apple created FaceTime and made it a selling point for the iPad.

In September, the company made FaceTime available on cellular networks instead of limiting it to Wi-Fi systems, almost certainly in response to increasing consumer demand.

Last week, Yahoo purchased a video chat company called OnTheAir. And in 2011, Microsoft paid $8.5 billion for Skype, a service for both video and audio-only calls. Though most people use Skype on desktop and laptop computers, the software for the service has been downloaded more than 100 million times just by owners of phones running Google’s Android mobile operating system. Microsoft built a service for its Windows 8 mobile phone that lets people receive calls even when Skype is not on.

Google, which has more than 100 million people a month using its Google Plus social networking service, now offers more than 200 apps for its video calling feature. It says it is interested not in making money on the applications, but in learning more about them so it can sell more ads by getting people to use its free video service, called Hangouts. Hangouts can be used for two-person or group calls, or for a video conference with up to 10 people.

“On a high level, Google works better when we know who you are and what your interests are,” said Nikhyl Singhal, director of product management for Google’s real-time communications group. “Video calling is becoming a basic service across different fronts.” While Mr. Singhal is an occasional user, he said, his 4-year-old daughter “is on it every day.”

Don’t expect video calling to improve productivity. Tango uses the same technology that enables video calls to sell games that people can play simultaneously. It sells virtual decorations like balloons to drop around someone’s image during a birthday call (both parties see the festive pixels). Google says some jokey applications on Hangouts, like a feature that can put a mustache over each caller, seem to encourage people to talk longer.

Currently, popular two-way games like Words With Friends on Facebook work by one player making a move and then passing the game over to the other player, not watching moves as they are made. Another promising area is avatars, like cartoon dogs and cats, that mouth speech when a user wants to have a video call but does not want to be seen.

The prospect of having to appear on-screen at any given moment might sound like a nonstarter for people who worry about bad hair days. But in fact, using mobile devices for video calls may be less bother than it seems.

“There may be natural inhibitions to being seen, but when I’m on a mobile device I’m out and about, so I’m more likely to be presentable,” said Michael Gartenberg, a consumer technology analyst at Gartner. “How people use this remains to be seen, but they are starting to expect it.”

Yet a new etiquette for mobile video calls is already emerging. People often text each other first to see if it’s O.K. to appear on camera. Video messages sent in the text box of a phone, like snippets of a party or a child’s first steps, are also useful precursors to video conversations. Mr. Singhal said making avatars for users of Hangout would be “an extraordinarily important area” as well.

The greatest challenge for the business may not be getting more consumers to use the service, but making sure the service works. Most phones have slight variations in things like camera placement and video formatting from one model to the next. “A camera can show you upside down if you load the wrong software on it,” said Mr. Setton of Tango.

As a result, the 80 engineers among Tango’s 110 employees have adjusted their software to work on more than 1,000 types of phones worldwide. The top 20 models have more than a million customers each, but the complexity of building software for a wider range of phones has made it hard for new mobile video companies to enter the field, Mr. Setton said.

Tango’s average video call used to last six minutes, Mr. Setton said, but when the company started adding other applications to go with the videos, like games and designs that float over people, the average call length rose to 12 minutes.

Brian X. Chen contributed reporting.

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